Including estimated taxes and local tax

Question

I paid the 4th quarter estimated taxes in 2025 and my city's local individual earnings tax (for calendar year 2024) in 2025. I forgot to include these in my federal and state tax return, which have both been accepted. I should be including these payments in my 2025, correct? If so, can I amend my returns now? Thank you!

JMSSGV · Answer

I think we need to be clear on terminology.

"Payment/Credit" is something that goes toward paying your taxes.

"Deduction" is something that reduces your taxable income.

On your FEDERAL income tax return, you can take a DEDUCTION for state and local taxes you paid IN THE CALENDAR YEAR. These are an itemized deduction and are entered on Schedule A. This includes the estimated state income taxes paid IN THE CALENDAR YEAR as well as all STATE income taxes that were withheld as shown on your W-2, 1099s, etc.  The State and Local Tax (SALT) deduction (including property taxes as well as income or sales tax) is limited to $40,000 for 2025.

On your STATE return, estimated tax payments you made FOR 2025 are entered (even if you made in 2026 (on or before 1/15, assuming your state uses the same due dates as the Federal does) as a PAYMENT, along with any state income tax you had withheld. You do not claim any kind of DEDUCTION on your state return for state or Federal estimated taxes you paid (unless your state has very unusual laws.)

moja · Answer

Hi JMSSGV,

Yes, the fourth quarter federal estimated tax I paid in 2025 was for tax year 2024. I reviewed my 2024 Return again and it looks like I included the fourth quarter payment as a Payment.

For the state and local estimated taxes, I am asking about including them as a payment/credit on my state/local return. For instance, while filling out the FreeTaxUSA questions, they are listed under "Itemized Deductions" → "Taxes Paid".

They ask "Did you make any other state or local income tax payments in 2025?" and include "Remember to include a 4th quarter 2024 estimated payment if it was made in 2025. On the other hand, if you made a 4th quarter 2025 state or local estimated payment in 2026 then don't enter that payment here. You can deduct a 4th quarter state or local estimated payment made in 2026 on your 2026 tax return." in their help section.

JMSSGV · Answer

The fourth quarter Federal estimated taxes you paid in 2025 were for tax year 2024, right? So you're saying you didn't enter those as a payment (credit) on your 2024 tax return? Was this not corrected by the IRS? If it wasn't, you need to amend your 2024 return.

For your state and local estimated taxes - are you asking about using them as a Schedule A deduction on your Federal return or as a payment on your state/local returns? Or both? As a deduction (on your Federal return), you would deduct them in the year you paid them, irrespective of the year they applied to. As a credit/payment, they're counted in the tax year to which you designated them to when you submitted them.

Please be more specific about the tax and calendar years involved, and whether you're asking about using them as a payment, a deduction, or both.